Medical debt soon will be banned on credit reports under Biden administration rule | CNN Business

CNN - Jan 7th, 2025

The Biden administration has finalized a rule to remove medical debt from credit reports, impacting around 15 million Americans. This measure, to be enforced 60 days post-publication, prohibits lenders from using certain medical information in loan decisions and bans the use of medical devices as collateral. The Consumer Financial Protection Bureau estimates this will erase $49 billion in medical bills, potentially increasing credit scores by an average of 20 points, and result in 22,000 more mortgage approvals annually. Vice President Kamala Harris emphasized this change will ease access to personal and business loans for millions of families.

This move addresses the long-standing issue of medical debt, a significant burden on American credit reports and a poor predictor of loan repayment ability. The initiative is part of a broader effort by the Biden administration to mitigate the impact of healthcare costs on consumers, following a 2022 plan to protect consumer rights. The rule complements past actions by major credit agencies to exclude certain medical debts from reports. Additionally, Vice President Harris highlighted ongoing efforts to eliminate medical debt through state programs and the American Rescue Plan Act, with billions in debt relief anticipated by next year.

Kamala Harris Biden Administration Consumer Financial Protection Bureau Credit Reports Medical Debt Loan Approval American Health Care Costs

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RATING

8.2

Fair Story

Consider it well-founded

The article provides a comprehensive overview of a significant policy change regarding medical debt and its impact on credit reports. It scores highly in accuracy, with well-supported facts and clear references to official statements and recent policy developments. However, the balance dimension could be improved by including more diverse perspectives, especially from critics or those who might be affected differently by the rule changes. The source quality is strong, relying on authoritative sources like the Consumer Financial Protection Bureau and direct quotes from government officials. Transparency is fairly well-handled, though there could be more detail on the methodology behind some claims. Clarity is another strength, with the article presenting complex information in an accessible and well-organized manner, although some sections could benefit from additional context or clarification.

Accuracy

The article is factually accurate, with claims supported by reliable sources such as the Consumer Financial Protection Bureau (CFPB) and direct quotes from officials like Rohit Chopra and Vice President Kamala Harris. The article accurately reports on the details of the new rule and its implications, such as the removal of $49 billion in medical bills from credit reports and the potential for a 20-point credit score boost for affected individuals. Additionally, it references the timeline for the rule's implementation and the historical context of related policies. However, the article could enhance accuracy by providing more quantitative data on the prevalence of medical debt among Americans to corroborate its statements about the issue's scale.

Balance

The article largely presents the positive impacts of the new rule on medical debt for consumers, as highlighted by quotes from officials like Vice President Kamala Harris. While it does mention the broader challenges of high healthcare costs and related frustrations, it lacks direct input from critics or those who could be negatively impacted by these changes, such as lenders or those concerned with how it might affect lending standards. Including perspectives from financial institutions or consumer advocacy groups that may have differing views on the rule's implications would provide a more balanced perspective. The article could also benefit from exploring potential unintended consequences of the policy change.

Clarity

The article is clear and well-structured, effectively communicating complex policy changes in a way that is accessible to readers. The logical flow from the announcement of the rule to its expected impacts makes the content easy to follow. The use of direct quotes and specific examples, such as the elimination of $1 billion in medical debt through the American Rescue Plan Act, aids in understanding the significance of the changes. The tone remains neutral and professional throughout, avoiding emotive language that could detract from the factual reporting. However, some sections could benefit from additional context, such as explaining the mechanisms by which medical debt affects credit scores, to enhance reader comprehension.

Source quality

The article relies on high-quality sources, including official statements from the Consumer Financial Protection Bureau and government officials, which adds credibility to the reporting. The use of direct quotes and a clear reference to a press release by the CFPB further bolster the reliability of the information presented. However, the article would benefit from a wider range of sources, such as independent experts in financial regulation or consumer credit, to provide additional context and verification of the claims. This would help ensure that the reporting is not overly dependent on governmental sources, which could introduce bias.

Transparency

The article is transparent in its presentation of the new rule, detailing its intended effects and the timeline for its implementation. It clearly attributes information to the CFPB and provides context for the policy change by referencing previous actions by credit reporting agencies. However, the article could improve transparency by offering more insight into how the CFPB's research was conducted and the methodology behind the estimated impacts, such as the average 20-point credit score increase. Additionally, discussing any potential conflicts of interest or affiliations of key stakeholders would enhance readers' understanding of the broader context.